The US finaial crisis has extended beyond the country's borders and reached Europe. We hear news about troubled European financial institutions every day, while some economies on the Old Continent have officially slipped into recession. There are fears that other EU members may follow suit.

Since foreign capital is very much involved in Bulgarian economy and even prevails in some sectors we turned to three market experts with the question „Which sectors on BSE can be considered less risky in view of the current situation?“.

Here is what they told us:

Tamara Becheva, analyst, Elana Trading

At the moment there are no low-risk sectors. Moreover, the investment decisions of more and more people are driven by panic.

Speculators are the market's leading force. Companies' fundamentals are not important.

For example, oil reached 140 dollars per barrel in the US, but oil stocks continued to decline.

Investors are very nervous and are ignoring factors such as industry outlooks and company fundamentals.

Stefan Angelov, chief dealer, Varchev Finance

As the global financial crisis is expanding, it is possible that there will be no unaffected sectors of economy.

The crisis will have a direct effect on financial institutions and investment intermediaries. All other sectors will suffer indirectly from declining investments, lower consumer spending, rising costs of materials etc.

The crisis will hit different sectors with different strength and will last for different periods of time. In the mid-term perspective, the pharmaceutical industry will be one of the least affected, as well as companies in the spheres of advertising, energetics and the processing industry.

Vladimir Nachev, broker, Investbank

All sectors will be hit by the crisis. In the past several weeks the problems of the US financial institutions became European problems too.

Bulgaria, as a member of the EU, will not be spared.

I expect prices in the real estate sector to slow down and perhaps to decline. The financial sector suffers from low liquidity, but as a whole the banks here are less exposed to risks than the US ones and some European banks which had invested heavily in US mortgage securities.

The sector of tourism will also be hurt as a result of the populations' declining purchasing power. The indexes of retail sales and consumer confidence in Europe are recording lower figures, which, together with the stricter crediting requirements, will affect the entire sector of manufacturing. The amount of foreign investments in the country will also suffer.

This article expresses the personal opinions of the people quoted and should not be viewed as a recommendation for buying/selling stock.